Should MPs follow Jeremy Corbyn’s example and release their tax returns?
The Guardian, by Gaby Hinslliff, Kate Maltby and Ellie Mae O’Hagan
Gaby Hinsliff: It doesn’t have to be a witch-hunt – for policymakers, it’s about public audit
So here’s a thing the actor Martin Clunes didn’t want you to know: he once had plastic surgery and tried to offset the cost against his tax bill.
He didn’t want you to know, according to an unsuccessful application for tax tribunal proceedings to remain anonymous, to avoid both mockery and damage to his “celebrity persona”. And one can see why. As Jimmy Carr, Gary Barlow and others accused of (perfectly legal) tax avoidance could testify, being named and shamed for trying to reduce your contributions to public services can be jolly damaging to one’s celebrity persona. It doesn’t half help encourage others to cough up for schools and hospitals though, which is why there are fewer hiding places now for those who test the rules. But what about those who make them?
We’re long past the days when it was enough for politicians to declare, as the chancellor Philip Hammond did on Sunday, that their tax affairs are all “perfectly regular” and expect everyone to take their word for it. Nobody’s suggesting Hammond has done anything wrong, but it is perfectly reasonable for the man who sets the rules to provide proof of how he personally interprets them.
It doesn’t have to be the beginning of some mass witch-hunt. Personally, I couldn’t care less about the tax returns of obscure backbenchers, still less individuals in public life more broadly. We should either copy Norway, Finland and Sweden and publish a summary of every citizen’s tax return – which come to think of it might have an interesting impact on the gender pay gap, as women discover exactly what their colleagues are earning – or accept that Brits have more hang-ups than Scandinavians about everything from nudity to money, and focus merely on those politicians with the power to change the tax system: namely prime ministers, chancellors, and their opposition party counterparts.
The precedent is already firmly established. David Cameron set it by releasing a return showing he had previously owned and profited from shares in an offshore trust set up by his father. Theresa May went further, publishing four years’ worth when she ran for leader, which were as dull as expected. And the fact that Labour made a somewhat ham-fisted job of publishing Jeremy Corbyn’s, with confusion over whether his leader’s salary was included in the right box, should not be allowed to distract from Hammond’s failure to follow suit.
None of the returns revealed so far have told us anything we couldn’t have guessed. But then the point of transparency isn’t what it reveals, it’s what the knowledge that you will have to account publicly for your actions deters. That’s as true for those who make the rules as those who break them.
As a rule, the British left is suspicious of the rituals of US politics – the American game is a showy media circus, easily manipulated by cynical millionaires. Even by British standards. So it’s odd to see them embracing an American ritual that exemplifies the hollowness of US gesture politics. When we bay for the tax returns of politicians, we want to strip them bare. True, we’d like to see where their conflicts of interest lie, or how tax-dodging the bastards really are. But there’s also an instinct to anatomise, to cut open their fiscal veins and check they’re human.
Kate Maltby: This is gesture politics – and futile anyway
The problem is that a politician’s tax return doesn’t show any of this. Pick a Tory backbencher at random, and his tax return will probably show his salary as an MP, income from UK investments, and income from any second jobs (already publicly disclosed on the parliamentary register of members’ interests). It won’t tell you what his parents’ income is, and whether they pay for the grandchildren’s school fees; it won’t tell you whether they, or a spouse, hold cash and “gift” it to him tax free, to avoid scrutiny. It certainly won’t tell you whether he has a secret bank account in Monaco, or whether he can expect to be a beneficiary of a foreign trust fund – unless he received income from it in the specific year disclosed. It tells you virtually nothing about property held abroad, and whether he’s paid tax on it in that country.
If you want to cut down on the corrupting relationship between money and politics, cut down on MPs holding second jobs. But the rich don’t get rich through income – especially not an MP’s income – they inherit it, marry it, or cash out on that jolly IPO (initial public offering) wheeze Charlie tipped them off to 10 years ago. Money is held in vast family networks.
Meanwhile, it’s easy to jump to unfair conclusions, particularly given the corrosive bad faith of our current political climate. Most people who keep a foreign bank account do so because their dad is French and you need to pay the nursing home in euros. Trust funds for grandchildren exist to keep out their druggie parents. Those who do hide their money are usually hiding it from spouses and in-laws: it used to be a feminist mantra that every woman who can should have a running-away fund. One thing is clear. The people who are really hiding their money from the tax man won’t be declaring it on their returns.
Perhaps this isn’t just about pitchforks. We take comfort from the parochial nature of a bureaucratic form because it reassures us that even ministers get muddled about exactly how to apply child credit. No one really expected Jeremy Corbyn to cheat on his tax return, but his enemies loved it when it appeared he may have entered his salary as opposition leader in the wrong box. Tax returns don’t tell us anything about the rich. But they do tell us about people just like us.
Ellie Mae O’Hagan: Don’t ask why Corbyn has published. Ask why Hammond hasn’t
Most experts trying to tackle tax avoidance agree that transparency would go a long way in tackling this scourge. In April 2016, head of the International Monetary Fund Christine Lagarde said that large-scale tax avoidance “should be a major concern. What could be done to address these issues is transparency.” Even a partner from the accountant PricewaterhouseCoopers (which has been accused of promoting tax avoidance on an “industrial scale”) wrote a list of 11 reasons why we need tax transparency. In Norway, everybody’s tax returns are available publicly.
Jeremy Corbyn’s decision to release his tax returns will probably be dismissed by many on the right as an example of performative leftism. But elsewhere in the world, it would be considered pretty normal – and it’s a decision supported by ardent capitalists. It’s accepted that tax plays a major role in reducing inequality (again – the OECD’s words, not mine); it’s also known that £13tn is hiding offshore in tax havens. Shouldn’t MPs do everything they can to ensure tax avoidance is not normalised, including publishing their own?
It’s true that MPs’ total incomes, while often significantly more than the average Brit, are just a drop in the ocean compared to major corporations. But MPs are also the ones who set British tax policy, and they have a say in worldwide tax policy. For instance, in January 2016, the Observer revealed that Tory MEPs were lobbying the EU to protect Google’s £30bn tax haven island. The Mirror discovered that 12 top Tory donors were being investigated by HMRC for taking advantage of tax avoidance schemes. It’s clear that there is an overlap here between what benefits the Tories directly and what the rules are in terms of tax avoidance. That’s why we need total transparency for all MPs when it comes to their taxes.
MPs are elected by us to decide how to spend the taxes we pay. Our taxes for pay their salaries, their expenses, their staff, and their homes. They are in the unique position of being paid public money while also deciding how it is spent. This means they have a responsibility to be as transparent as they can with the British people, so that we can hold them to account. We shouldn’t be asking ourselves why Corbyn has published his tax return; we should be asking why Philip Hammond won’t publish his.